Bell Canada’s plans to expand its landline networks and delve into the IPTV market have stalled, but Canadian IT analysts say the company’s ExpressVu television offering will tide the firm over while it concentrates on expanding its wireless coverage and improving customer service.At the end of 2004, Bell launched a five-year, $1.2-billion plan to expand its fibre-optic lines into 4.3 million homes in the Quebec City/Windsor corridor that would enable it to offer faster Internet and IPTV.

According to a report in the Globe and Mail newspaper, however, a regulatory filing revealed that Bell had spent $400 million over the last two years but had only reached a third of its network “nodes” goal and had pushed the completion date of the project back to 2009.

Nothing to lose In the story, Bell spokesperson Mark Langton said that the delay is in line with the company’s wanting to invest in projects that can produce revenue faster, including “upgrading its wireless network, improving customer service, and expanding its retail presence.”

Roberta Fox, senior partner with the Mount Albert, Ont.-based Fox Group Telecom Consulting, said that Bell doesn’t have much to lose by delaying the landline project and its thrust into the IPTV space. “They have video distribution (with Bell ExpressVu) already, so, compared to the other carriers, there’s not as much need to go to IPTV,” she said.

Mark Goldberg, head of Thornhill, Ont.-based telecommunications consulting firm Mark H. Goldberg & Associates, said that IPTV may increase Bell’s television offerings, but it’s already doing just fine without it. “People don’t care about whether they buy IPTV. They just want to buy TV. They’re indifferent as to how it gets to them. They just want a wide array of channels, HDTV, and PVRs, and Bell has been able to deliver that using Bell ExpressVu,” said Goldberg.

The Globe and Mail story also pointed out that Bell is waiting on “the development of a key piece of equipment, and a more advanced piece of Microsoft software, in order to launch IPTV.” Goldberg said that, this way, Bell would be able to move forward with the next-generation integrated video experience.

It will also ensure a smooth-running product, according to Fox. “With IPTV, they’re not jumping in until they’re ready. Why do you need to have the network without an application or capabilities?” she said.

em>Savvy move “IPTV is not going to be instant salvation for them,” said vice-president and communications research principal analyst with IDC Canada Lawrence Surtees. According to the story, Bell Canada’s IPTV will run over its expanded fibre network, which should hit two million households in 2007.Goldberg thinks Bell’s decision to concentrate on developing its wireless business is a savvy one. “Wireless is a major growth market right now,” he said.

Fox also sees the move toward providing areas like the GTA with wireless as one that will sustain growth. “There’s not as much business growth in (the targeted Windsor/Quebec City corridor) . . . plus, there’s still a lot of capacity available for (Internet services) in (the targeted Windsor/Quebec City corridor) and if the Windsor area reached capacity, it could be subcontracted at a wholesale rate from the local utility companies,” she said.

However, Surtees a finds the strategy counterproductive. “It’s all about robbing Peter to pay Paul,” he said, pointing out that expanding the landlines should be a key part of a Bell’s business.

“In the battleground between the cable companies and the telephone companies, it isn’t who has the voice customers anymore – it’s the battle for the converged wallet of the customer.”

Focusing on customer service earlier could have saved Bell a lot of money and grief, said Surtees. “Bell’s customer service has been abysmal, a real mess over the last couple of years. Now they have to take their eye off the strategic part of the business,” he said.

Goldberg agreed. “Customer service is their best move to innoculate against the competition.”

Goldberg said he doesn’t think these moves have anything to do with the recent rumours of American private equity firm Kohlberg Kravis Roberts (KKR) working with Canadian partners to buy out BCE, which would be one of the biggest deals of its kind. “I don’t think that any possible financial action (like an influx of private equity) has any influence in their strategy. It doesn’t add up to KKR coming calling. You don’t manage a company based on this type of thing,” Goldberg said.

Surtees, too, doesn’t think that these recent moves stem from any concrete fear of a buyout, although Bell does seem to be in “panic mode.” Said Surtees: “I think there’s a feeling of panic at Bell, which is symptomatic of short-term management. Taking money (from one initiative and putting it into another) is not long-range thinking.”